Democracy and Capitalism

Lots of backlog of things to write about. But let’s start with Robert Kuttner’s superb article on Karl Polanyi in the most recent New York Review of Books. (Behind a paywall.)

Here’s Kuttner’s first paragraph:

“What a splendid era this was going to be, with one remaining superpower spreading capitalism and liberal democracy around the world. Instead, democracy and capitalism seem increasingly incompatible. Global capitalism has escaped the bounds of the postwar mixed economy that had reconciled dynamism with security through the regulation of finance, the empowerment of labor, a welfare state, and elements of public ownership. Wealth has crowded out citizenship, producing greater concentrations of extreme inequality and instability, organized less for the many than for the few.”

All to true. As various commentators have said, at least Stalin and Hitler claimed to have an ideology that justified their murderous ways. For Trump, it’s just power. Take that you underlings—and like it! It’s just power. Who, after all, is going to stop them?

And here’s Kuttner’s last paragraph:

“Democracy cannot survive an excessively free market; and containing the market is the task of politics. To ignore that is to court fascism. Polanyi wrote that fascism solved the problem of the rampant market by destroying democracy. But unlike the fascists of the inter-war period, today’s far-right leaders are not even bothering to contain market turbulence or to provide decent jobs through public works. Brexit, a spasm of anger by the dispossessed, will do nothing for the British working class; and Donald Trump’s program is a mash-up of nationalist rhetoric and even deeper government alliance with predatory capitalism. Assuming democracy holds, there could be a counter-mobilization more in the spirit of Polanyi’s feasible socialism. The pessimistic Polanyi would say that capitalism has won and democracy has lost. The optimist in him would look to resurgent popular politics.”

The first point is that Hitler was a Keynesian. Economic growth and stability insured by massive government spending. Profits to the manufacturers, sure. But jobs for the masses as well.

The second point is that Kuttner is a social democrat of my stripe. Market and state must be balanced, each one working to tame the potential abuse of power by the other. The time is out of wack because that balance has been destroyed.

This doesn’t mean a blind commitment to current political institutions—or to the state as currently configured. But it does mean seeing politics, as Kuttner puts it, as fundamentally required to tame the market. (My next post will feature some wonderful suggestions from Dean Baker about how to do jus that.)

Against this social democratic vision can stand the work of various leftists who say social democracy is a dead letter, a form that no longer fits the reality of our times. Such is the position of Hardt and Negri. I am working through their most recent book, Assembly, right now and it will be the subject of subsequent posts.